Dissenting voices raised over consumer revolution by market pundits

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For all its sweeping character and the increasing numbers drawn into its wake, the consumer goods boom has clear limitations and must be clearly understood for what it is and isn't. It isn't, for instance, a consumer revolution in the sense that a purist would understand the term.

Says Ajit Haksar, chairman emeritus of ITC: "This is not a consumer revolution. A real consumer revolution comes not when people lap up all the goods offered but when they start rejecting goods because of quality or price. What you really see in the market is a widening base of goods, and a new look being given to them."

Chitale, Haksar and Tandon: Dissenting voices

Prakash Tandon, former chairman of Hindustan Lever and currently president of the National Council of Applied Economic Research (NCAER), finds, like Haksar, that the boom in consumer goods leaves him cold.

"I don't see any consumer revolution at all," he argues. "The only thing that has happened is that some more brands of over-priced and shoddy goods are being palmed off on people who have loose black money lying around."

A real consumer revolution comes about, says Tandon, when the producer respects his consumer. "Most advertisements do not mention the price, many of them don't even tell you the product's special features. All they offer is glamour. The consumer is not respected, he is being taken for a ride."

As examples of out-dated and high-priced goods he lists cars, refrigerators, entertainment electronics and housing - and also public sector monopolies like power, telephones and the railways. Tandon further argues that the majority of products are still elitist, without the effort to offer value for price.

Shoddy Goods: Haksar tends to agree, and feels this is a product of the quick-buck culture that he sees all around. And he adds the important rider that there is, no boom at all in many traditional consumer fields, like textiles, or in the eastern states, where less money seems to be available for spending.

Both pundits' criticism of the developments in the market-place are eminently justified. Niky-Tasha, for instance, sells jazzed-up gas stoves that are essentially a copy of Japanese originals, at four to five times the price in Singapore. Domestic colour TV sets sell at three times the normal international price even when virtually all the components are imported, arid despite this are often of indifferent quality.

Almost nobody is aiming at low margins and a mass market, with most manufacturers satisfied with small volumes but compensating for this with high margins. Haksar feels this could be because of the Government's policy of withdrawing a variety of concessions and incentives the minute a unit crosses from small-scale to medium-scale operations, so that there is no incentive for people to think big.

As for quality Krishna Basrur, vice-president of the Consumer Guidance Society of India (cost) and convenor of its testing committee, discloses some shocking results that emerged from the society's tests on the quality of consumer products. Says he: "Because of a shortage of funds, we have tested only certain classes of goods. But in all of them we found that quality v?as poor, and the claims made by the manufacturers untenable."

Low Standards: Thus, in 1979, the CGSI tested pressure stoves. Of 22 pieces belonging to 11 brands that were tested, as many as 18 Were substandard and failed safety tests. Among clinical thermometers, not a single one of those tested was accurate within the stipulated margins of error. Of a dozen electric irons tested in 1982, only five passed the test. Even three-pin electrical plugs failed the safety tests.

Basrur adds: "But our most shocking results were found in water filter candles, which are sold by large manufacturers like Bajaj, Voltas and Balsara. All of them claim that they make water 100 per cent germ-free. We tested seven samples, including all the leading brands, and all were substandard except for a model called Sudarshan, which is made by a small-scale manufacturer and based on a German model."

One very noticeable feature of the consumer goods boom is the new slickness, professionalism and often provocativeness of advertising that has supported the new products. But Basrur points out that many advertising claims are also "untenable".

Examples: Modern Bakeries claimed that its bread was rich in protein although no protein supplement was added. Parke Davis's Neko soap is advertised as a medicated soap because it contains mercuric oxide, but Basrur says that mercury compounds are now known to be unsafe and harmful.

Consumer Exploitation: Numerous examples of consumer rip-offs abound. Although Indian ears are shoddy and thoroughly over-priced, the companies manufacturing them now charge a basic price that excludes the cost of basic fittings that were earlier a part of the car.

In the Ambassador, the petrol cap now does not have a lock, and you have to pay extra for this and also for an ampere meter, clock, battery gauge, and oil pressure gauge.

The additional price for these: Rs 800. Premier Automobiles has introduced a Padmini Special that has a few extra fittings but costs a great deal more; and consumers are forced to opt for this because production of the ordinary model has been sharply curtailed.

Even in bicycles, manufacturers charge extra for the seat, handle covers and other fittings, Basrur feels that "the Government and the business community are jointly looting the consumer, The manufacturers feel they can get away with anything, and the Government considers everything a luxury and taxes it heavily."

Mean while, tax expert M.P. Chitale has more basic worries. Where are the funds coming from that fuel the boom in consumer goods? Are they draining the country's already scarce foreign exchange resources? Could the funds have been used elsewhere, where they would have benefited a larger number of people?

Should a large-scale market be developed in consumer goods to bring down costs? If limited to small-scale activity, will this become yet another high-cost industry behind a high tariff wall? "I don't have the answers to these questions," says Chitale, "But someone like the Planning Commission should do a meaningful study of this since resources on a massive scale are going into consumer goods."

Many of Chitale's questions don't have easy answers, and the source of much of the money that is fuelling the consumer goods boom remains an enduring mystery in a country that has an annual per capita income of no more than Rs 2,000.

The only plausible explanation is that while the majority stay in a condition of grinding poverty, a growing minority is able to launch on a hedonistic and very commercial consumption drive that accentuates the existing dualism in the economy. These trends are now likely to be further accentuated by the imminent advent of commercial TV, and the, growing teach of both; films and advertising through the ubiquitous video cafes.

While these involve basic issues concerning the pattern of economic development that should be followed, Haksar is optimistic about what might eventually result in the consumer goods market. "You already see more competition in the market, so there is greater consumer choice. The consumer is not yet king, but once you have competition the rest should follow."

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